Technology firms and antitrust

Here we go again

As one long-running antitrust case comes to an end, others emerge

TRUSTBUSTERS on either side of the Atlantic had seemed in permanent disagreement in 2009, at least when it came to technology firms. In January the European Commission decided to go after Microsoft for bundling its web browser with its operating system—a tactic which America's Department of Justice (DoJ) had decided to let stand a long time before. In May the commission fined Intel €1.06 billion (then $1.44 billion) for having abused its dominance, whereas the Federal Trade Commission (FTC) in Washington did not seem interested. And in November the commission objected to the proposed $7.4 billion purchase of Sun Microsystems, a troubled maker of computer hardware, by Oracle, a business-software giant—a deal that the DoJ had already approved.

Yet on December 16th, American and European antitrust regulators began playing in tune. First Neelie Kroes, Europe's competition commissioner, announced that she had reached a settlement with Microsoft. Starting in March, all versions of Windows will come with a “choice screen” inviting users to install any of 12 different browsers. This should make Europe's browser market more competitive, and end the decade-long antitrust action against the world's biggest software firm.

Then, as if on cue, the FTC announced a few hours later that it would sue Intel, charging that “the company has illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly.” Although slightly broader in scope, the FTC's complaint essentially mirrors the commission's. It argues that Intel, which supplies more than 80% of the chips used in personal computers, has forced computer-makers to limit their purchases of rival products from such competitors as AMD and VIA Technologies by threatening to raise prices or cut supply.

Commission-watchers now expect it to approve Oracle's bid for Sun early next year after concessions from Oracle. The company publicly declared that it would, among other things, “continue to enhance” MySQL, an open-source database program owned by Sun. The commission is worried that Oracle, the world's biggest seller of proprietary database software with a market share of nearly 50%, will squelch MySQL, which it sees as a “a particularly important competitive force”.

Antitrust is now firmly established as a competitive weapon in the “platform wars” between big technology companies. All three cases got this far thanks largely to lobbying by rivals. They will continue to generate cases for regulators to spar over. In November, for example, Google announced that it would buy AdMob, a mobile-advertising start-up, for $750m. Microsoft, which has already lobbied against the Oracle-Sun deal, will certainly try to stop this one, too. It does not want Google, which already rules much of online adverting, to dominate mobile advertising as well. Having been the subject of complaints for a long time, Microsoft is now doing lots of complaining.